NEW YORK (CNN/Money) -
Q: Which comes first, the influenza vaccine or the egg?

A: For now, the egg. But that could change.

Drug makers have been producing flu vaccines inside chicken eggs for at least 30 years, but as the deadly threat of bird flu gathers in Asia and Europe and governments scramble to stockpile drugs, this tried-and-true egg method is starting to look time-consuming and inefficient. Scientists are toiling to find ways to make flu vaccines without using eggs, but that could be years away.

Back in April, the French drug maker Sanofi-Aventis (down $0.30 to $40.30, Research) was awarded a $97 million contract by the U.S. Health and Human Services Department to develop a cell-based method of flu vaccine production sans oeufs. Dr. James Matthews, senior director of science and health policy for the vaccine-making subsidiary Sanofi Pasteur, said that growing the vaccines in cell cultures could shave a month off the six-month egg method, speeding up worldwide production in a capacity-constrained market.

However, Sanofi's cell-based vaccine production is still in the pre-clinical phase and could take four or five years before reaching completion, said Dr. Matthews. This assumes completion of phase 3, the final stage of testing required by the Food and Drug Administration, though to avoid a pandemic the government would forgo its usual regulatory requirements.

"We're working on a process that we think will be commercially viable," said Dr. Matthews. "Our current working assumption is that we'll have the time and we'll work all the way to phase 3 and have large-scale safety trials."

In the cell-based method, Sanofi grows the vaccines inside stainless steel bioreactors that contain thousands of liters of infected cell culture at facilities in Swiftwater, Penn. and Mary L'Etoile, France. Dr. Matthews said the cell-based method is licensed from Dutch biotech Crucell (down $0.38 to $25.69, Research). Once completed, this method could be used for all flu vaccines, not just bird flu.

Sanofi is the first company to be awarded a U.S. government contract for developing a new method of vaccine production, but it is not the only drug maker experimenting with alternate methods. Crucell, which works on cell-based and DNA-based methods of vaccine production, has also licensed its technology to British drug maker GlaxoSmithKline (down $0.51 to $50.02, Research) and Swiss drug maker Roche (up $0.22 to $144.18, Research), according to Bernstein analyst Gbola Amusa, who projected that a non-egg production method could be on the market by 2008. PowderMed, a privately-held British company, is also developing DNA-based methods for vaccine production, while Philadelphia-based Hemispherx Biopharma (down $0.11 to $2.21, Research) is working on a cell-based method.

"We're very active in cell-based work," said Hemispherx chief executive officer William Carter. "We'd like to get [vaccine production] down to a couple months. But I can't determine how long and successful the new approaches will be. Don't expect your grandmother to be using these vaccines in a year or two."

There are other companies working on alternate methods of vaccine production, but aside from Sanofi-Aventis the U.S. government did not identify the companies that responded to its request for proposal.

Building up for bird flu

In addition to working on this new method for vaccine production, Sanofi is testing an experimental vaccine for bird flu, also known as H5N1, and has supplied doses to the U.S. government for testing.

Bird flu can be transmitted from birds to humans and has killed at least 60 people in Asia, with the most recent reported fatality occurring this week in Thailand. Infected flocks were recently discovered in Turkey, Romania and Russia, arousing concerns of a European pandemic. Scientists recently discovered that the 1918 influenza pandemic that killed at least 50 million people originated in birds and was transmitted to humans, stirring up fears that H5N1 could mutate into a strain that could pass from person to person. The U.S. government is allocating nearly $4 billion to stockpile medication to protect the population against bird flu.

Vaccines, which prevent influenza, are generally considered to be the best method of halting a bird flu pandemic before it actually happens. But there is also a thriving market for anti-virals, which is dominated by Roche, producer of Tamiflu, a pill that can save people from bird flu if it is taken within 48 hours of infection. Andreas Theisen, analyst for German bank WestLB, estimated that Roche will receive $1.7 billion to $1.8 billion in Tamiflu orders from the U.S. government. In addition, GlaxoSmithKline markets an anti-viral inhalant, Relenza.

There is unlimited demand for bird flu vaccines and anti-virals, and eBay orders for Tamiflu were drawing inflated bids before Roche put a halt to online sales. There is money to be made for all these companies, though drastic price increases would be politically unwise, said Bernstein analyst Amusa.

"We believe big pharma is unlikely to charge much higher prices given that developing nations are in need of product and given the negative goodwill that could emerge if companies are seen as 'price gouging' at a time of international need," wrote Amusa is a recent report to clients.

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To read about the billions of the dollars the U.S. government is spending on bird flu, click here.